Indian equity benchmark indices have been recording new historic heights since June 28, propelled by positive global cues, strong inflows from Foreign Portfolio Investors (FPIs), a resurgence in rural consumption, a drop in US Dollar Index, and optimistic expectations from Indian Inc. in Q1 FY24.
"The decline in the dollar index to below 100 on Friday, the lowest level in one year, is favourable to emerging markets. India is the largest recipient of FPI flows YTD among emerging markets. The selling in China continues, and FPIs were sellers in EMs like Thailand and Vietnam also recently," said Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"FPIs continue to invest in financials, automobiles, capital goods, realty and FMCG. FPI buying in these sectors have contributed hugely to the surge in prices of stocks in these sectors and the Sensex and Nifty scaling record highs," he added.
During Friday's trading session, Nifty 50 index marked a new historic high of 19,595. Notably, the index surpassed the 19,000 mark for the first time on June 28 and took merely five days to cross the 500 points on July 06.
Similarly, S&P BSE Sensex index also achieved a record high of 66,159 during Friday's trade, having breached the 64,000 mark on June 28, the index has crossed the 2,000-point mark in a span of just 10 trading sessions.
Amidst this prevailing market euphoria, 50% of stocks within the Nifty 500 index are trading close to their one-year highs. According to Trendlyne data, 250 out of the 500 stocks in the index are currently trading 1-8% away from their 52-week highs.
Max Financial Services, Mastek, Divi's Laboratories, Procter & Gamble Hygiene & Healthcare, Honeywell Automation, Berger Paints, SBI Life Insurance, UNO Minda, Grindwell Norton, Century Plyboards, Oberoi Realty, Asian Paints, Eris Lifesciences, and Aarti Drugs were some of the stocks that are revisiting their 52-week high after 6–11 months of a gap.
Conversely, 30 stocks, or 6% of the Nifty 500 Index, are struggling to gain momentum in the current bull market and are gradually approaching their 52-week lows. Some of these stocks include JK Paper, Gujarat Gas, Gujarat Fluorochemicals, Voltas, SRF, Zydus Wellness, VIP Industries, Vinati Organics, NOCIL, Shree Renuka Sugars, and Mahindra Logistics.
Going forward, Rupak De, Senior Technical analyst at LKP Securities, said, "The Nifty index's break above the consolidation range of 19300–19500 suggests increasing optimism in the market. The resistance at 19500, which was heavily built by Call writers, has been surpassed on a closing basis."
"This breakthrough is expected to lead to a significant rally as the Call writers unwind their positions. The bullish crossover on the momentum indicator RSI reinforces the upward momentum. The Nifty may potentially reach levels around 19700–19720, but it's important to consider the short-term support at 19300," he added.
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